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Sun, Jan 20, 2008

Hawaiian Airlines May Cancel Airbus Order

Decision Rests On Faltering Talks With Pilots

Hawaiian Airlines announced Friday it may cancel a $4.4 billion deal to purchase up to 24 new Airbus aircraft, due to a standoff with its pilots union.

The deal for Airbus A330 and A350XWB jets was expected to be finalized this week, according to The Honolulu Star-Bulletin, to meet a deadline set by Airbus and engine manufacturer Rolls Royce. Pilots say the terms of the deal also must be approved by them.

Pilots are asking for changes in their sick-leave accrual, improved rest facilities on long-haul flights and an end to the contract negotiations that have dragged on for more than a year.

"They went out and they negotiated this deal and think we should just be jumping up and down for joy saying, "Thank you very much for getting these planes for us," and we'll go fly them," said Captain Eric Sampson, chairman of the Hawaiian Airlines unit of the Air Line Pilots Association. "The collective bargaining agreement doesn't let them do that. This has to be a negotiation."

Hawaiian spokesman Keoni Wagner said the company won't comment on the ongoing negotiations.

"We certainly can't commit our company to a future it can't afford, and we felt an obligation to warn the financial markets today that we have reached a point in negotiations with our pilots that suggests we may not be able to move forward with our fleet plan," he said in an e-mailed statement.

Hawaiian's long-haul fleet currently consists of 18 Boeing 767-300 airplanes, and plans were to replace four aircraft in the next two years. The existing leases may need to be renegotiated instead.

Stock analyst Nick Capuano, who covers the airline for Los Angeles-based Imperial Capital LLC, said the Airbus deal is a bonus, not a necessity, for Hawaiian.

"It is certainly not necessary in terms of the health of the company," he said. "If they can't come to an agreement with the pilots, it's better that they not do it."

Hawaiian's flight attendants reached an contract agreement late Wednesday. That agreement will remain tentative until a deal is reached with the pilots, according to Sharon Soper, president of the Hawaiian Airlines unit of the Association of Flight Attendants.

"The whole deal is contingent upon everyone reaching an agreement," she said. "It is specific to working rules and conditions surrounding these new aircraft."

The Airbus deal would result in a complete overhaul of Hawaiian's long-haul fleet and allow the carrier to fly nonstop from Hawaii to Asia, Europe, Australasia and the Americas.

As ANN reported last November, the agreement calls for Hawaiian to acquire six A330-200s and six A350XWB-800s, with purchase rights for an additional six of each aircraft. Deliveries would begin in 2012.

FMI: www.hawaiianair.com, www.alpa.org

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